By: Lerong Lu & Alice Lingsheng Zhang (Oxford Business Law Blog)
Over the past few years, the Chinese authorities have been increasingly concerned about the enormous economic power and influence of the country’s big tech companies, especially those operating in the e-commerce and financial service sectors. On 10 April 2021, the State Administration for Market Regulation (SAMR), which is the Chinese competition watchdog, imposed a record fine of 18.23 billion yuan ($2.8 billion) on the e-commerce giant Alibaba which had abused its market dominance. Alibaba was said to exploit its leading market position, platform policies and data, and algorithmic methods in order to force merchants to sell exclusively on Alibaba Group’s online shopping platforms including Taobao and Tmall. The closing price of NYSE-listed Alibaba was $223.31 on 9 April 2021, down 13% from $256.18 on 23 December 2020 when the anti-monopoly investigation was formally launched. Although the current Anti-Monopoly Law of the People’s Republic of China (PRC) came into effect in 2008, it had never been used to punish leading tech companies and platform economies in the country prior to the Alibaba’s case. Therefore, the anti-monopoly probe is the first of its kind in China, which echoes the global trend of scrutinising the anti-competition activities of big tech corporations like what has happened in the EU and the US. The Alibaba’s fine is equivalent to 4% of the Group’s annual revenue in 2019. In addition, Alibaba was asked by the SAMR to file self-examination and compliance reports to the regulator for the forthcoming three years.
